Major building society launches quirky new Isa with a 4.12% rate

Skipton Building Society has launched a new easy-access cash Isa.

The building society has launched an 'annual allowance' cash Isa which pays a 4.12 per cent rate in an attempt to get customers to use their Isa allowance early rather than rushing to use it up at the end of the tax year.

Skipton said it launched the new Isa after seeing how many customers typically wait until the end of the tax year to use their Isa allowance.

There’s no set deadline to get funds in the Isa though, once the account is open customers can deposit this tax year’s Isa allowance into the account up until the end of the tax year.

There is a catch in that the new Isa only permits current year subscriptions and does not allow Isa transfers in from other providers or previous tax years.

Alex Sitaras of Skipton Building Society said: 'While the deadline runs until April 2026, this competitive rate gives customers a great opportunity to start benefiting from their tax-free savings sooner rather than later.'

It comes as Skipton saw a 45 per cent jump in the number of cash Isas opened between 23 June to 30 June as savers rushed to stuff Isas with cash ahead of rumoured rule changes that the cash Isa allowance would be slashed from £20,000.

This plan was put on pause by the Chancellor last week after a furious backlash from savers and industry figures.

Sitaras saud: 'The decision to keep the cash Isa limit the same is a big win for savers and we look forward to continued consultation from the government on future Isa changes.

Customers can transfer current year Isa subscriptions from other Skipton Isas - but only if all of the funds held in the account were paid in during the current tax year. It is not open to older Isa contributions.

Anyone can open the annual allowance Isa and you don't have to be a Skipton Building Society member to open one.

It's not the best rate on the market as other Isas pay close to 5 per cent.

The best easy-access Isa pays 5.44 per cent and is offered by CMC Invest. This Isa comes with a bonus rate of 0.85 per cent for three months, after which the rate reverts to 4.59 per cent.

Meanwhile Plum and Trading 212 offer easy-access cash Isas paying 4.98 per cent, though Plum only allows three free withdrawals before the rate is cut.

There is no short term bonus on Skipton's annual allowance Isa that drops off after a few months and money is easily accessible without restrictions.

The rate is variable so it could drop or rise depending on the savings market.

The account can be opened online, though Skipton's app, by email, over the phone or in a branch.